Pork Profit Maximizer – Retail Edition
September 30, 2019
USDA issued on Friday, September 27 the results of its quarterly survey of US ’Hog and Pig’ operations. Most of the USDA survey results were on the higher end of analyst estimates and we think the report may be construed as somewhat bearish by futures on Monday.
However, the market focus remains squarely on the outlook for exports to China and participants may overlook the immediate implications of this report Coming into the report analysts were expecting the total inventory of market hogs as of September 1 to be 3% higher than a year ago.
USDA reported the inventory of market hogs at 71.248 million head, 2.442 million head or 3.5% higher than a year ago. This is 377k head more than the average of analyst estimates. The higher inventory should not come as a big surprise, however.
In the June report, USDA noted that the pig crop for Mar-May was estimated to be 3.7% higher than a year ago, implying a +3.5% growth in inventory come September.
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